Huge leverage opportunity for planners

Financial planners have a prime opportunity to change their image and specialise their service to leverage demand, according to the latest SMSF research report.

The report, titled Intimate with self-managed superannuation, was commissioned by the SMSF Professionals’ Association of Australia (SPAA) and Russell Investments to provide insight into SMSF moving forward.

Focus group research continues to show that some SMSF trustees do not favour financial planners dealing with their portfolio because they believe planners are more focused on pushing a product or are not experienced in the SMSF space. Instead, trustees prefer to deal with specialists such as accountants for tax and compliance matters.

This leaves an opportunity open for planners to specialise their services and take a larger slice of SMSF revenue, which is proportionally greater than that of non-SMSF clients, the report said.

“They are more informed and educated – 75% of trustees have an undergraduate degree,” she said.

“They are decision makers. We’re seeing a more demanding trustee, and they are saying ‘I want somebody who can provide valuated service for me’. They are not willing to pay for product styled advice – these people are interested in genuine strategy advice.”

Slattery said planners need to specialise and take advantage of the huge opportunities before them. Having strong networks, providing a specialised service particularly in the SMSF arena long term, as well as SPAA accreditation are all things trustees indicated were of high value.

“There is huge opportunity being presented. There is a little tsunami happening here,” said Slattery. “More and more people are committing and becoming more engaged as a trustee.”

According to the research, the large majority of trustees look for investment expertise as the most desirable skill in their main professional adviser, with an average ranking score of 7.3 in 2013, up from 7.0 the year before.

Surprisingly despite this, the intent among advisers who do not currently service SMSFs is on a downward trend.

Only 17.2% of those who are not in the space intend to offer SMSF advice in the future, while those who have no plans to offer this service in the future peak at 44.8%.

These results come even though in 2013 trustee clients represented 39.6% of the respondents’ client base but accounted for 43.2% of revenue.